Superior Drilling
financial leverage refers to using borrowed capital as a funding source to finance Superior Drilling Products ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Superior Drilling financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Superior Drilling's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Superior Drilling's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Superior Drilling's total debt and its cash.
To perform a cash flow analysis of Superior Drilling, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Superior Drilling is receiving and how much cash it distributes out in a given period. The Superior Drilling cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
The current price rise of Superior Drilling created some momentum for stockholders as it was traded today as low as
0.95 and as high as
1.0 per share. The company directors and management may have good odds in positioning the company resources to exploit
market volatility in
June. The stock standard deviation of daily returns for 90 days investing horizon is currently 7.06. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Superior Drilling partners.
Is Superior Drilling drop permanent?
The treynor ratio is down to -0.67 as of today. Superior Drilling Products is displaying above-average volatility over the selected time horizon. Investors should scrutinize Superior Drilling Products independently to ensure intended market timing strategies are aligned with expectations about Superior Drilling volatility. Superior Drilling Products is a potential penny stock. Although Superior Drilling may be in fact a good instrument to invest, many penny stocks are speculative in nature and are subject to artificial price hype. Please make sure you totally understand the upside potential and downside risk of investing in Superior Drilling Products. We encourage investors to look for the signals such us email spams, message board hypes, claims of breakthroughs, volume upswings, sudden news releases, promotions that are not reported, or demotions released before SEC filings. Please also check biographies and work history of current and past company officers before investing in high volatility instruments, penny stocks, or equities with microcap classification. You can indeed make money on Superior instrument if you perfectly time your entry and exit. However, remember that penny stocks that have been the subject of an artificial hype usually unable to maintain its increased share price for more than just a few days. The price of a promoted high volatility instrument will almost always revert back. The only way to increase shareholder value is through legitimate performance backed up by solid fundamentals.
Our Final Takeaway
While few other entities in the oil & gas equipment & services industry are either recovering or due for a correction, Superior Drilling may not be performing as strong as the other in terms of long-term growth potentials. Taking everything into account, as of the 13th of May 2022, we believe Superior Drilling is currently
undervalued. It barely shadows the market and projects
below average chance of distress in the next two years. However, our overall 90 days buy-sell recommendation on the company is
Strong Sell.
Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Superior Drilling Products. Please refer to our
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